SBIA Applauds Committee Passage of the Small Business Investor Capital Access Act

WASHINGTON, D.C. (July 23, 2025) – The Small Business Investor Alliance (SBIA), the national association representing lower middle market private equity investors, applauded House Financial Services Committee passage of the Small Business Investor Capital Access Act, legislation introduced by U.S. Representatives Andy Barr (R-KY) and Nydia Velázquez (D-NY). The bill seeks to modernize the exemption from Securities and Exchange Commission (SEC) registration for certain private fund advisors by immediately raising the assets under management (AUM) threshold to $175 million and indexing the threshold to inflation thereafter.

“This is a smart and necessary modernization of outdated regulation,” said SBIA President Brett Palmer. “The committee’s strong support underscores the importance of aligning regulatory thresholds with economic reality. This bill will reduce compliance costs for smaller funds and allow more capital to flow to America’s small businesses.”

Background and Rationale

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act introduced a $150 million AUM threshold for SEC registration exemptions applicable to private fund advisers. However, the threshold was too low when it was enacted and it has never been raised nor indexed for inflation since, notwithstanding the growth of the economy and evolution of the private capital markets since 2010. This lack of adjustment has created a growing regulatory burden for small fund managers, many of whom are focused on investing in underserved communities and early-stage businesses. The legislation ensures that future adjustments occur automatically.

Funds under the current $150 million threshold represent less than 0.5% of the private equity industry's total AUM, yet they are subject to the same compliance requirements as much larger institutions. These compliance costs divert capital away from job-creating investments. By adjusting the threshold upward regularly, the legislation ensures that regulatory standards evolve with economic conditions, creating a fairer and more efficient environment for small business investment.

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